The stock market was flat to mixed on Thursday with the Dow and S&P 500 closing with small gains, the Nasdaq ending flat, while small caps and the the I-fund were down modestly. Bonds were down as yields and the dollar moved up. The bears have failed to make any appearance over the last couple of months, nor have we seen any signs of profit taking with one day left to trade in 2023.
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As 2023 wraps up today, it is starring new highs in the face. While I harp on the fact that stocks have gone straight up over the last two months, the longer-term charts remind me that the recent spike higher has only gotten the S&P 500 back to where it was at the end of 2021, when it was last making new highs. Making new highs usually means higher prices going forward, although short-term pullbacks often occur first. However, it is very rare to see a new high made on the last day of the year, so January is entering some lightly traveled territory.
The two month rally also brings up the old cycle of emotions chart. There may be some euphoria in the air, which usually comes toward the end of a move, but the fact that we had a three month correction right before this rally began may tell us that this is just the excitement or thrill portion of the cycle. However, it we don't get a decent pullback soon to digest the 2-month gains, we could movie into euphoria very quickly.
With most smart money and dumb money sentiment at very bullish levels, there may not be enough buyers left to keep the rally going too much longer, but a nice couple of weeks of selling could do the trick.
Seasonally, January is a good month for stocks on average, but there have been some whopper down years as well. Historically early January can be a good tell for the entire year, although that pattern hasn't held up too well in more recent years.
Chart provided courtesy of www.sentimentrader.com
Boring markets favor the buy and hold crowd which is probably not the bulk of our audience, and trying to say something interesting when the market is doing the same thing almost every day, week, and month for the last couple of months has made it tough to write compelling content. For those of you who have been members and / or regular readers, I can't tell you how much I appreciate it, considering the circumstances. So, here's to a volatile, more trading friendly year in 2024. I'm waiving the white flag for this year.
Are you on the TSP Talk AutoTracker? If not, now is the time to get in for 2024! It's free and prizes are given monthly and annually for the best performers. More information: TSP Talk - Get Started in the TSP Talk AutoTracker
Holiday Closing per tsp.gov: "Some financial markets will be closed on Monday, January 1, in observance of New Year's Day. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (January 1) will be processed Tuesday night (January 2) at Tuesday's closing share prices."
The S&P 500 (C-fund) eked out a small gain yesterday making it 5 up days in a row after that smoke screen sell off on December 20th. If it looks like a bull market, sounds like a bull market, and smells like a bull market, maybe we have ourselves a bull market. This may have been the least bearish two month period, as far as lack of dips, that I have seen in a long time. But as I mentioned, it's tough to find many bears out there right now and that could mean some backing and filling is coming. The index is now less than a percentage point away from tagging the 2021 highs.
DWCPF (S-fund) and the small caps have led the rally to help end this year on a mighty bull market run. There's no signs of it slowing down, but a new year can change things.
EFA (I-fund) finally got hit with a rally in the dollar to slow it down but clearly the trend is still up as long as that narrow trading channel stays intact.
BND (bonds / F-fund) is on the same page as the stock market, which isn't always the case. If stocks do pull back, it will interesting to see if the money continues to flow into the bond market, changing the coexistence of the two.
Thanks so much for reading! Have a Happy New Year and enjoy your long holiday weekend! See you next year.
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
Daily Market Commentary Archives
To get weekly or daily notifications when we post new commentary, sign up HERE.
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
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[TD="width: 338, align: center"] Daily TSP Funds Return
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[/TR]
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As 2023 wraps up today, it is starring new highs in the face. While I harp on the fact that stocks have gone straight up over the last two months, the longer-term charts remind me that the recent spike higher has only gotten the S&P 500 back to where it was at the end of 2021, when it was last making new highs. Making new highs usually means higher prices going forward, although short-term pullbacks often occur first. However, it is very rare to see a new high made on the last day of the year, so January is entering some lightly traveled territory.
The two month rally also brings up the old cycle of emotions chart. There may be some euphoria in the air, which usually comes toward the end of a move, but the fact that we had a three month correction right before this rally began may tell us that this is just the excitement or thrill portion of the cycle. However, it we don't get a decent pullback soon to digest the 2-month gains, we could movie into euphoria very quickly.
With most smart money and dumb money sentiment at very bullish levels, there may not be enough buyers left to keep the rally going too much longer, but a nice couple of weeks of selling could do the trick.
Seasonally, January is a good month for stocks on average, but there have been some whopper down years as well. Historically early January can be a good tell for the entire year, although that pattern hasn't held up too well in more recent years.
Chart provided courtesy of www.sentimentrader.com
Boring markets favor the buy and hold crowd which is probably not the bulk of our audience, and trying to say something interesting when the market is doing the same thing almost every day, week, and month for the last couple of months has made it tough to write compelling content. For those of you who have been members and / or regular readers, I can't tell you how much I appreciate it, considering the circumstances. So, here's to a volatile, more trading friendly year in 2024. I'm waiving the white flag for this year.
Are you on the TSP Talk AutoTracker? If not, now is the time to get in for 2024! It's free and prizes are given monthly and annually for the best performers. More information: TSP Talk - Get Started in the TSP Talk AutoTracker
Holiday Closing per tsp.gov: "Some financial markets will be closed on Monday, January 1, in observance of New Year's Day. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (January 1) will be processed Tuesday night (January 2) at Tuesday's closing share prices."
The S&P 500 (C-fund) eked out a small gain yesterday making it 5 up days in a row after that smoke screen sell off on December 20th. If it looks like a bull market, sounds like a bull market, and smells like a bull market, maybe we have ourselves a bull market. This may have been the least bearish two month period, as far as lack of dips, that I have seen in a long time. But as I mentioned, it's tough to find many bears out there right now and that could mean some backing and filling is coming. The index is now less than a percentage point away from tagging the 2021 highs.
DWCPF (S-fund) and the small caps have led the rally to help end this year on a mighty bull market run. There's no signs of it slowing down, but a new year can change things.
EFA (I-fund) finally got hit with a rally in the dollar to slow it down but clearly the trend is still up as long as that narrow trading channel stays intact.
BND (bonds / F-fund) is on the same page as the stock market, which isn't always the case. If stocks do pull back, it will interesting to see if the money continues to flow into the bond market, changing the coexistence of the two.
Thanks so much for reading! Have a Happy New Year and enjoy your long holiday weekend! See you next year.
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
Daily Market Commentary Archives
To get weekly or daily notifications when we post new commentary, sign up HERE.
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
